• Program-Related Investments and Private Foundations — New Guidance Reflects the Modern World
  • April 27, 2012 | Authors: Ofer Lion; Douglas M. Mancino
  • Law Firm: Hunton & Williams LLP - Los Angeles Office
  • New proposed regulations illustrate the broad range of programs and investment types that can qualify as program-related investments for private foundations. Program-related investments are excepted from the private foundation excise taxes applicable to investments that jeopardize the carrying out of a private foundation’s exempt purposes (i.e., investments that are too risky). The examples in the current regulations focus on domestic situations involving deteriorated urban areas and the poor, with investments structured either as loans or purchases of common stock. While the proposed regulations do not modify the existing regulations, their more modern examples help to answer the following frequently asked questions about program-related investments.